Blighty law opens biz to foreign ownership

Congloms cast wary eye on biz

This article was updated at 9:15 p.m.

LONDON — The U.K.’s controversial Communications Bill was approved by Parliament on Thursday, opening up ownership to firms outside Europe for the first time and paving the way for a slew of takeovers in Blighty’s TV and radio industries.

Since the bill was first bruited 18 months ago, the Hollywood majors have sent mixed messages about their interest in acquiring controlling stakes in British media.

Disney cable supremo Anne Sweeney made a speech in the U.K. last August extolling the virtues of such American involvement, and AOL TW chairman Richard Parsons made similarly positive remarks last September in Britain, calling the U.K. “a key beachhead into Europe.”

Studios silent

Since then there’s been little public comment Stateside on the issue. U.S. studios were invited to give testimony during the British Parliamentary hearings on the bill but none did so.

Viacom chairman Sumner Redstone purportedly discussed the pros and cons of investing more heavily in the U.K. on one of his trips to London last winter — and in theory, he could be interested in radio as well as TV investments.

Rival radio giant Clear Channel chairman Lowry Mays, on the other hand, publicly ruled out such interest last December, noting that his company had recently divested itself of some properties in the U.K.

Clear Channel Intl. prexy Bob Cohen reiterated the stance Thursday, telling Daily Variety, “We have no radio investments in the U.K., and we don’t have any plans to change that.”

That could just be talk, as no one’s cards have yet been put on the table — and even when they are, as in the Vivendi auction, they can still be reshuffled.

John Malone, whose Liberty Media has been rebuffed in Europe on a couple of fronts, ostensibly still wants to expand there. And Haim Saban, who recently lost out in his bid to take over the Kirch Media assets, is almost certain to take a close look at what’s on offer in the U.K.

No rush likely

“Still, the studio guys aren’t likely to rush into anything. They’ve got the Vivendi auction on their minds, Rupert is trying to secure DirecTV, and remember, they got pretty burned in Germany in the Kirch bankruptcy, so they’ll be looking closely at the costs involved, and not doing anything rash,” one longtime global media consultant suggested.

Some Hollywood-based observers believe the Brits are overly worried about a wave of Yank invaders hitting their shores.

“Just as we have seen the inability of a European group (Viv U) to manage an American media business, ITV or Five are just not the same as an MTV launching a music channel, or CNN a news channel.

“In short, a few media congloms may have their strategic planning groups prepare the decks, but in the end, they will likely stick to their knitting and try to fix the broken pieces they already own at home,” one observer opined.

Protected content

The Communications Act, which became law today after receiving its Royal Assent, will allow non-European Union companies to acquire media companies such as commercial webs ITV or Five.

The law will, however, protect the content of these broadcasters through a plurality test, which will seek to ensure that media owners are committed to a balanced and impartial presentation of news and comment.

The test was introduced after concerns that allowing U.S. companies or domestic newspaper owners, such as Rupert Murdoch’s News Intl., to acquire the webs would reduce the diversity of British TV.

“I believe that in its final version, the act will deliver on its central aim — to bring the interest of us all as citizens and consumers to the fore while increasing investment and maintaining high standards,” said Tessa Jowell, the government’s media secretary.

Trade and Industry Secretary Patricia Hewitt added, “The act delivers significant changes to the regulatory structure, striking the right balance between protecting the interests of consumers and citizens and keeping burdens on industry to a minimum. It will help keep Britain at the forefront of communications.”